Starting next year every time a health plan proposes a premium hike of 10% or more for individual or small-group plans they must submit them for review to the federal agency with actuarial justification. The federal government, along with state regulators, will look at whether the rate increase is justified by underlying health spending. If not, federal regulators will advise the state to block the increase. If the state does not have that power to block, HHS will post its review online to publicly pressure the HMO to back down. Right now only 21 states have any review power over insurance rates, according to the Kaiser Family Foundation.

"When California's largest insurance company raised rates 39% the insurance commissioner investigated and found that they were based on faulty information," said Sebelius during the announcement. "Consumers don't have the information they need to know if they're getting a bad deal."

There have been a few instances where states have tried to block insurers from raising their prices. In Maine Wellpoint's Anthem Blue Cross plan sued to raise rates 18.5% after regulators initially blocked the hike. In Connecticut regulators recently rejected a 20% price hike.

The federal agency is flirting with assuming control that it lacks legally. Sebelius acknowledged that her department has no power to block an increase itself. By 2014 states will have that power via the health reform bill. The Administration may often be limited to just spotlighting what it believes to be an unreasonable increase. "The bright light of sunshine will cause insurers to think twice and check their math," Sebelius said.

Jay Anghoff, who runs the HHS Office of Consumer Information and Insurance Oversight, stated that health insurers often can't justify their premiums. They don't put in the effort to do so because they don't have to, he said. These rules would change those practices. Also at the press conference a woman from Connecticut whose family owns a dairy farm recounted how in 2008 her insurance plan bumped up rates and how she received relief from her insurance department.